Twenty-First Century Fox "reached a preliminary deal to acquire full control of Sky" for £11.2B ($14.1B), as billionaire Rupert Murdoch "seeks to consolidate" his TV empire, according to Penty & Hellier of BLOOMBERG. Fox, which already holds a 39% stake in Sky, proposed acquiring the rest for £10.75 ($13.51) a share, according to a filing Friday in the U.K., a premium of 36% over Thursday’s closing price. Gaining total ownership of Sky would give Fox a "powerful distribution platform in Europe" for pay-TV and Internet. Sky, Europe’s top pay-TV company, provides service to 21.8 million customers across the U.K., Ireland, Italy, Austria and Germany. A deal "would marry the global content business of 21st Century Fox with Sky’s direct-to-consumer capabilities," Fox said in a statement. The satellite provider has "staved off competition from phone and cable companies in part by securing rights to exclusive programming, such as sports and HBO shows, along with original content." The company has paid record sums to air Premier League matches and keep ahead of BT, which also broadcasts some of the league’s games. While Sky "held on to most matches, viewers were down this year as of mid-November," and there is "no guarantee the outlay will prevent subscriber losses" (BLOOMBERG, 12/9). In N.Y., Chad Bray reported the takeover approach came more than five years after 21st Century Fox’s predecessor company, News Corp., withdrew a $12B offer for the rest of Sky -- then known as BSkyB -- as a "firestorm erupted over phone-hacking by the media in Britain." The new offer represents a 40% premium to Sky’s closing price on Tuesday, "the last day before the initial Fox approach." Shares of Sky closed up nearly 27% in trading in London on Friday after the announcement but "ended the day below the offer price." In the U.S., shares of 21st Century Fox closed down 2%. Sky said that its independent directors "had indicated to 21st Century Fox that they were willing to recommend the proposal to shareholders," subject to reaching an agreement on the other outstanding terms. Gaining full control of Sky "would be consistent" with efforts by James Murdoch since he took over as CEO to simplify -- and "gain greater control over" -- 21st Century Fox’s ventures (N.Y. TIMES, 12/9). The BBC's Chris Johnston reported according to Reuters' calculations, Fox would pay £11.25B ($14.14B) for the stake in Sky that it did not already own. Sterling's 16% fall against the U.S. dollar in the wake of the Brexit vote has made U.K. companies "more attractive targets for foreign companies." Fox is required to "clarify its intentions" by Jan. 6, "or walk away for at least six months" under U.K. takeover rules (BBC, 12/9).
LYONS SPEAKS OUT: In London, Daniel Boffey reported U.K. PM Theresa May "has been challenged" by former BBC Chair Michael Lyons to "stand apart from her predecessors" by resisting Rupert Murdoch’s £11.2B takeover of Sky. Lyons said that the government should apply the "fit and proper person" test to the proposed deal. Lyons chaired the BBC Trust from '07-11, during which he "engaged in a war of words with James Murdoch over media ownership." Lyons said, "This is an interesting moment for Mrs. May. Is she really interested in a different type of future for this country? If so, she should do anything in her power to resist the further growth in the Murdochs’ grip on news and media. I recognize options are limited, but that doesn’t mean we should stay silent or ignore the fitness test" (GUARDIAN, 12/10).
